I'm here to assist and explain the deduction in QuickBooks Online (QBO), @pixidoc.
The error you're encountering is due to QuickBooks Online (QBO) enforcing the annual contribution limit set by the IRS for 401K plans. For 2021, the contribution limit for employees aged 50 and older, which includes the catch-up contribution, is $26,000. However, the regular limit for employees under 50 is $19,500.
In your case, it seems there is a mismatch between the set limit within the employee settings on QBO ($30,500) and the actual IRS maximum allowed limit. Since QBO adheres to federal guidelines, it overrides your manually set limit with the allowed maximum amount. This mismatch may originate from updates in contribution limits that were not reflected in your QBO settings if these were manually adjusted in the past.
To resolve this, you'll need to contact QuickBooks support to adjust the grayed-out setting to the correct IRS limit. Alternatively, if you have access to admin settings where such limits can be adjusted, you should update it to align with current federal limits. For the most accurate and current information, always refer to the IRS guidelines on contribution limits for retirement plans.
Here's how to reach them:
- Click the Help menu in the upper-right-hand corner.
- Type in Talk to a human, then press Enter.
- Select Contact Support Team.
- Type again Talk to a human and click Contact Support Team.
- Choose a way to connect with us.
Feel free to continue posting questions in the Community if you have any questions or need further assistance with your payroll in QBO or performing any bookkeeping tasks in the program. The QuickBooks team and other users are always here to help and provide guidance.
